Agenda and draft minutes

Pension Policy & Investment Committee
Monday, 10th December, 2018 10.00 am

Venue: Room 2, Civic Centre, Silver Street, Enfield, EN1 3XA. View directions

Contact: Paul Reddaway - 020-8379-4730 Email:  paul.reddaway@enfield.gov.uk 

Items
No. Item

96.

Minutes

97.

Welcome & Apologies

Minutes:

The Chair welcomed all attendees to the meeting.

 

Apologies for absence were received from Councillor Mahmut Aksanoglu.

98.

Declaration of interests

Minutes:

There were no declarations of interest in respect of any item listed on the agenda.

99.

Standing Items pdf icon PDF 11 KB

A.    Business Plan  2018/19 Update

B.    Risk Register

C.    Pension Fund Governance

D.    Corporate Governance

Additional documents:

Minutes:

Business Plan 2018/19 - No major changes, funding levels have improved.

Risk Register –

Pension Fund Governance – Aon representative invited to LPB meeting 20th December 18 for an update.

Corporate Governance – Committee to bring back proposals regarding fossil fuels to the next meeting.

 

100.

Minutes of previous meetings: 29th October pdf icon PDF 102 KB

Minutes:

Agreed:

 

The minutes of the meeting held on 01 August 2018 were agreed as a correct record.

 

Matters Arising:

 

·       The Chair advised, Disinvest Enfield had a meeting with Unison regarding an open discussion on ESG issues being taken seriously

·       It was noted that the Committee needs to decide whether the Pension, Policy and investment principles should be reviewed and updated, as well as focussing on climate change

·       The Mayor of London is holding a meeting next February 19 on climate change.

101.

LCIV - Infrastructure presentation

Minutes:

Received a presentation pack on London Civ infrastructure Forum from Kevin Cullen (Head of Client Services) Robert Evans (LCIV) and Pete Stalley (LCIV).

 

Noted:

 

·       Infrastructure Objectives were to target net returns of 8 - 10% p.a. and target cash yields of 4 - 6% (income) p.a

·       The Highlighted regional breakdown figures were 50 – 70% (Europe), with a focus to the UK and 30-50% (Rest of the World) including US & Australia

·       Total infrastructure return (17.7%) generated from 40 investments totalled to 5.4 billion (US Dollars) of capital commitments across primaries, co-investments and direct investments, between 2014 and 2018

·       Subscription dates advised were 1st Close - 1 April 2019, 2nd Close - 1 September 2019 and 3rd Close - 1 April 2020.

 

The Committee thanked London CIV for their presentation.

102.

Asset allocation to infrastructure

Please see Part 2 Report

Additional documents:

Minutes:

Received a report to provide the Committee with a high-level overview of the

different implementation routes of accessing infrastructure that are

relevant for the Fund.

 

Noted:

 

·       The Committee is underweight with its allocation to infrastructure

·       It was highlighted that there are reservations around Vito’s

·       A comment was made relating to the 5 year cap being a problem in infrastructure.

 

Agreed:

 

That the Committee will revisit the item at the next meeting and that the Chair is to find out exactly how Vito’s work.

103.

Absolute Bond Review

Please see Part 2 Report

Additional documents:

Minutes:

Received a report on Absolute Return Bonds for the Committee to Agree to dis-invest from Insight ARB 400+ product and to consider an alternative ARB manager.

 

M&G inflation report (Tabled) for the Committee to approve the Pension Fund take-up of the application to subscribe to further units.

 

Paul Reddaway Introduced the report.

 

Noted:

 

·       Absolute Return Bonds have underperformed and lost money

·       Although it was noted that ARB’s have preserved Capital

·       At the previous Committee meetings, It was agreed that the mandate would be kept under review (3% of total Fund assets)

·       Aon as requested have provided an overview of the role that ARBs are providing within the Fund's bond portfolio, alternative options have also been produced should the Committee lose conviction in the investment strategy and/or manager

·       The Committee previously suggested that 50 Million could be invested in MAC

·       M&G inflation opportunity have performance well and met all objectives

·       30th September 18 the Enfield element of M&G was valued at £44.2m

·       M&G fund have returned 7.3%pa since inception compared with 4.9 for its target return (RPI) (Long Term)

 

Agreed:

 

·       Not to come out ARB’s until Aon produce options relating to where should the money go to at the next meeting

·       Committee to respond via email regarding M&G, specifically around the risks, opportunity benefits and the projected return figures.

104.

Private Equity subscription

Please see Part 2 Report

Minutes:

Received a report on Adam Street Subscription asking the Committee to approve the 2019 $10m subscription to Adam Street Partners (ASP) and approve an additional £5m contribution to the ASP 2018 subscription. We will review making a further $5m contribution to the 2019 subscription in November 2019.

 

Paul Reddaway Introduced the report.

 

Noted:

 

·       Adam Street Partners have produced consistent good returns over 15 years

·       It was proved that it has been advantageous to invest on an annual basis

·       An increased amount from $10m to $15m is due to increase in company size.

 

Agreed:

 

·       The Committee to only contribute $10m per year, and to be increased to $15m only after the Committee have a refresher session on Enfield Asset Allocations.

·       Special Meeting to re scheduled before the next PP&I Committee (28.02.19)

 

105.

Quarterly Performance Report

Please see Part 2 Report

Additional documents:

Minutes:

Received a report on Enfield’s quarterly Investment Report September

2018.

 

Noted:

 

·       The Fund value has grown by 3.45% over the quarter ended 30th September 2018 outperforming the benchmark by 1.3%

·       The Fund has made an annual return of 7.5% - 1.3% ahead of the benchmark

·       The latest funding projection shows the fund now being funded at 99%

·       US market performed stronger than UK this quater

 

Agreed:

 

·       The Committee was asked to note the Aon quarterly Investment report 30th September 2018.

·       Next meeting to look at other managers

·       CQS – $50m allocation

 

 

106.

AOB

107.

Date of the next meeting

Thursday 28th February 2019